A CP Rail locomotive sits at the company's Port Coquitlam yard east of Vancouver in this file photo.DARRYL DYCK/The Canadian Press
Strong earnings reports and major deal making in the pharmaceutical sector pushed the Toronto stock market modestly higher Tuesday.
The S&P/TSX composite index gained 24.35 points to 14,518.03. The Canadian dollar gave up early gains to move down 0.19 of a cent to 90.6 cents (U.S.) as the U.S. dollar strengthened in the wake of data showing existing-home sales fell 0.2 per cent last month to an annual rate of 4.59 million, higher than the annual rate of 4.55 million that economists had expected.
U.S. indexes were also positive with the Dow Jones industrials ahead 82.75 points to 16,532, the Nasdaq composite index climbed 35.18 points to 4,156.72 and the S&P 500 index was up 8.82 points to 1,880.71.
Canadian drug company Valeant Pharmaceutical International Inc. has teamed with Bill Ackman's Pershing Square Capital Management in a cash and stock bid worth around $40-billion for Botox maker Allergan. Under the buyout offer, which isn't backed by the Allergan board, shareholders would receive $48.30 in cash and 0.83 Valeant share for each share of Allergan. Valeant shares gained $8.24 to $147.
Elsewhere, Swiss pharmaceutical giant Novartis AG is buying GlaxoSmithKline PLC's cancer-drug business for $14.5-billion (U.S.), plus up to $1.5-billion more if certain milestones are met, and to divest most of its vaccines business to GSK for $7.1-billion, plus royalties. Separately, Novartis said it will sell off its animal health division to U.S.-based Eli Lilly & Co. for about $5.4-billion. Novartis shares gained 90 cents to $86.36.
On the earnings front, Canadian Pacific Railway had $254-million (Canadian) of net income in the first quarter, up from $217-million a year earlier. Net income per share increased 16 per cent year-over-year, rising to $1.44 from $1.24 in the first quarter of 2013. The Calgary-based company's revenue also increased, to $1.509-billion from $1.495-billion. Analysts on average had expected earnings of $1.41 per share on revenue of $1.51-billion. Its shares climbed $8.65 to $172.64.
Teck Resources Ltd. posted an adjusted profit of $105-million or 18 cents a share, down from $328-million or 56 cents per share in 2013. That was below the 24 cents per share that analysts expected. Revenue also fell more than analysts had projected, dropping to $2.084-billion from $2.33-billion and below the $2.098-billion that had been forecast. Teck also plans to eliminate 600 positions, delay the restart of a B.C. coal mine and cut spending by five per cent. Its shares rose 23 cents to $24.24.
Rogers Communications Inc. weighed on the TSX as the telco reported that quarterly net income dropped 13 per cent to $307-million or 57 cents per share. On an adjusted basis, the results missed analyst expectations, coming in at 66 cents per share, four cents below the average estimate. Wireless revenues, by far the biggest part of its business, dropped by two per cent to $1.73-billion and its shares shed $1.47 to $42.81.
Commodity prices were mixed and the energy sector was flat while the May crude contract in New York was down $1.76 to $102.61 (U.S.) a barrel.
The gold sector was also little changed while June bullion was $7.30 lower to $1,281.20 an ounce.
May copper was unchanged at $3.04 a pound and the mining sector was up 0.4 per cent.